Wal-Mart Day at the LA Times

Two pages of the LA Times, two constrasting views of the Wal-Mart issue that, together, illustrate tremendous confusion in the Democratic Party over an issue where clarity would help them: Health care.

First, the Times’ lead editorial, which chastizes the Democratic Party for its “shameful demonization” of the discount retailer:

Most Americans do not want their politicians ganging up on one company. Wal-Mart may be a behemoth that employs 1.3 million people in this country and earned $11 billion in profit last year, but it still looks like bullying when politicians single out one business to scapegoat for larger societal ills. And when they start passing laws aimed at their scapegoat — as the Maryland Legislature did when it passed legislation forcing Wal-Mart to spend a certain amount on employee healthcare — the judiciary rightly balks. A federal judge struck down the regulation, holding that it violates laws requiring equal treatment of employers.

But there is no stopping the campaign rhetoric. At an anti-Wal-Mart rally last week in Iowa, Biden noted that the retailer pays people $10 an hour, and then asked: “How can you live a middle-class life on that?” It’s clearly the company’s fault, at least from a skewed senatorial perspective, that all Americans cannot live a comfortable middle-class life. How dare it pay prevailing retail wages? Bayh, who appeared at another rally, was quoted as saying that Wal-Mart is “emblematic of the anxiety around the country.” That may be true. But if it’s the emblem he’s worried about, he should stay in Washington and work to make healthcare more affordable for working families.

The gusto with which even moderate Democrats are bashing Wal-Mart is bound to backfire. Not only does it take the party back to the pre-Clinton era, when Democrats were perceived as reflexively anti-business, it manages to make Democrats seem like out-of-touch elitists to the millions of Americans who work and shop at Wal-Mart.

But then, on the facing page, columnist Erin Aubry Kaplan performs a rather difficult pirouette: Defending former UN Ambassador Andrew Young’s racially insensitive comments to the LA Sentinel, made on behalf of Wal-Mart, while condemning him for making those comments…on behalf of Wal-Mart. Get it?

After sapping the local economies of rural and semirural America, Wal-Mart set its sights on the urban market — corporate-speak for big, diverse cities like Chicago and Los Angeles that are densely populated with middle- to low-income black and Latino consumers. It swooped into Inglewood two years ago and put an initiative on the ballot that would have allowed one of the first Wal-Mart Supercenters in the state to be built — and would have allowed Wal-Mart to do it with virtually no city oversight. Inglewood voters rightly rebuffed the measure, rejecting Wal-Mart’s pitch that $5 T-shirts and $7-an-hour jobs would be the most transformative thing to happen to downtrodden black folk since the civil rights movement.

In such a context, bringing in former civil rights hero Young to do damage control, to belatedly lend some black credibility to the “urban” effort, seemed like a bad joke. Wal-Mart obviously missed the irony. The famously suave Young didn’t blink an eye.

Then he found himself face to face with the Sentinel crowd, which tends to be deferential to any black dignitary but which also includes a few skeptics, especially on the Wal-Mart issue. Undoubtedly thinking he could speak frankly to his own — that he could keep it real, as it were — Young repeated what blacks have said for generations: that members of other ethnic groups account for a disproportionate share of the merchant class in their own community.

He said it badly, and in painting all those merchants as uncaring and unethical, he said it too broadly. But he had a point. The chronic lack of business ownership among blacks in black communities is a real problem, and it was a major factor in civil unrest in 1965 and in 1992.

Young’s comments were called racist, and I don’t entirely agree. Certainly it’s despicable to exploit racial and economic anxiety in order to convince the black media that Wal-Mart is a solution. Being racially or ethnically specific, however, is not the same as being racist.

In ’92, people talked openly about the friction between Korean shopkeepers and their black customers in South L.A. because, well, it was there. It had consequences. That window of public discussion has closed; now, discussing racial or ethnic groups in any forum less dry than academia is considered almost vulgar. In condemning Young as racist, we also killed the messenger.

Don’t get me wrong: Young paid the appropriate price. But the real vulgarity is the dire economic picture in black and brown neighborhoods represented all too well by the overabundance of “stale bread, and bad meat and wilted vegetables” that Young cited. Loaf for loaf, a Wal-Mart Supercenter might have better food. But it — and Young — hardly have the right stuff.

Kaplan’s circular reasoning unintentionally supports the Times’ editorial position. Young was fired for making a reasonable point in an unreasonable way, using unacceptable ethnic stereotypes to illustrate a larger truth: The “Mom and Pop” stores in lower-income communities–the stores that Wal-Mart critics say they are worried will be run out of business–don’t deserve special protection if they aren’t serving their communities.

More broadly, Young was blowing the whistle on the sham aspects of the campaign against Wal-Mart. Wal-Mart Watch and WakeUpWalMart.Com are components of a “corporate campaign,” which is a term used by both labor and management to describe a labor-funded PR campaign to denigrate a company in order to force that company to agree to labor demands that can’t be won via collective bargaining or traditional organizing of workers.

In most cases, corporate campaigns are dishonest and border on blackmail. About a decade ago, I represented a health care firm that was targeted for a corporate campaign. The union running the campaign wanted the firm to waive its rights and make it extremely easy for the union to represent the firm’s workers. These workers had rejected the union up to now, but the union wasn’t willing to take no for an answer. So they started a corporate campaign against my client.

The corporate campaign never mentioned the plan to organize the workers. Instead, it accused my client of killing its patients. Since my client ran a chain of nursing homes for the elderly, it was not hard to find dead former patients to talk about. But the union figured that if it said “patients die” enough times, business would suffer, and this prospect would cause the company to change its position. The corporate campaign was damaging, but unsuccessful.

Labor has good reasons to be concerned about Wal-Mart. I don’t begrudge the labor movement getting into a fight with the retail giant. Wal-Mart poses a direct threat to union-won high wages and good benefits for workers at grocery chains like Ralph’s and Vons, as we saw with the grocery strike of a few years ago.

Wal-Mart can cut prices because they don’t pay their workers as much, and don’t lavish benefits on them. Over time, to stay in business, other retailers will have to match Wal-Mart’s wage and benefit structure — and they will find workers who are willing to take jobs that pay less. Unions want to forestall that trend because it will put yet more private sector workers out of their reach.

Wal-Mart’s policies are hastening a day of reckoning that has been looming for decades. The idea that employers should be responsible for our nation’s health care is a historical oddity; a byproduct of World War II-era wage and price controls, and political decisions that benefits should not be taxed as income in order to allow unions to win increases employee compensation without increasing their take-home pay.

Now that most Americans don’t work for big companies or belong to labor unions, this jury-rigged, inefficient and unfair model for providing health care is getting exposed — ironically, by Wal-Mart, which takes the position that consumers shouldn’t be forced to pay a premium price for a product in order to subsidize the health care of the workers who sold it to you.

So, who should?

The LA Times apparently thinks liberals have gotten off track with their attacks on Wal-Mart. They’re saying: Stop trying to force Wal-Mart to subsidize health care — and start working on a plan to get the federal government to do it. Democratic politicians fighting Wal-Mart are defending a status quo that doesn’t exist anymore. Organized labor is sending its political supporters in the Democratic Party down a primrose path to serve its own, narrower ends.

If Wal-Mart disappeared tomorrow–or if Wal-Mart suddenly decided to give all its workers health care coverage–that would still leave tens of millions of American families without anyone to subsidize their health care coverage. The Times, I think rightly, is chiding Democratic politicians for taking cheap shots at Wal-Mart as a substitute for doing anything to correct that basic injustice.

Perhaps, as Evan Bayh suggested, Wal-Mart is a symbol. But if your children get sick, symbolism can’t cure them. Developing a universal health care plan won’t be an easy thing, but if Democrats want to win in 2006 and 2008, they’d better start. Attacking Wal-Mart is a distracting indulgence in demagoguery.


2 thoughts on “Wal-Mart Day at the LA Times

  1. Excuse me, but…the Democrats put forth a health care plan under Bill (and Hillary) Clinton in 1993, and the Republican shit storm that blew in (harbinger of the hate campaign and hate politics that plagued the Clintons throughout their White House tenancy) pretty much destroyed the chances of a decent government health care program for at least a generation.

    It’s a wonder any Democrats are touching the issue at all, even using Wal-Mart as a pawn/scapegoat.

  2. “For a generation?” I disagree. Since ’93, the magic of the marketplace has only left more people un- or under-insured. The only reason the issue isn’t more salient now is that 6 years of Bush have left too many issues on the front burner, it’s hard to pick just one to focus on. Given that, it seems almost frivolous to expend so much valuable time and energy on Wal-Mart. There are so many bigger things to worry about.

    The failure of the Clinton health plan was not forordained. Hilary’s plan was so complicated, almost anything one said about it could be construed as true. Plus, the Clintons believed the polls that told them anything with “health care” on it was going to be popular, and weren’t prepared for the counterattack. So, we learn from our mistakes and do better next time, hopefully within a couple years.

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